Winning isn't everything, even in business, where being No. 1 often leads to wide competitive moats, powerful network effects, and big profits as you roll over the competition. But not every leader judges his business based on what the competition is doing. Case in point: Netflix (NASDAQ:NFLX) boss Reed Hastings, who at one point a while back said in an interview, "At the office, I'm the one that says, 'We suck.' Don't get me wrong. We're better than everyone else, but we suck compared to what we are going to be."
David Gardner has more than one reason for loving that particular bit of humble-brag, and he shares some of them in this segment of this Rule Breaker Investing "Great Quotes" episode.
A full transcript follows the video.
This video was recorded on Oct. 24, 2018.
David Gardner: Great Quotation No. 3: Great Quotation No. 3 comes from one of my favorite CEOs; maybe one of your favorite CEOs, too. I won't even name him yet. Maybe you can guess from the quote itself. This is like a paragraph -- several sentences strung together.
He begins, "I see all the imperfections in Netflix. I see all the things that aren't working. At the office I'm the one that says, 'We suck. Don't get me wrong. We're better than everyone else, but we suck compared to what we are going to be.' Of course, in general, I'm constraining myself from saying these things because they are too easy to take out of context. But as an entrepreneur, that's how you have to look at your product. Compare yourself to what you want to be, what you will be, in five years, and that should be so much better than what you have today."
So yes, you've probably guessed by now that's the CEO of Netflix, Reed Hastings. And what's fun about that quotation -- I'm going to say a little bit more about it as an entrepreneur in a second -- but what's fun about that quotation is he didn't say it last month or last year. I pulled that quote in 2013, dropped it into my Evernote file and saved it until today to share it with you, because it's kind of fun, now, since it is five years after he said that quote.
And by the way, if you want to read that whole article, it was an interview with him. It's at TheNextWeb.com. If you just google "thenextweb" [all one word], "Reed Hastings," "2013" you'll see the article I'm talking about entitled, Inspiring Entrepreneurs: What Netflix CEO Reed Hastings has learned in his business career.
But that was published just about five years ago this month, and so Reed was thinking about what Netflix is today when he said that. And if you think back to where Netflix was in 2013, it was definitely on a comeback. It was already a winner and a great winner from the previous decade. But do you remember Qwikster in 2011 and how badly Netflix got thrown for a loop? A self-inflicted wound, really, by in part CEO Reed Hastings who acknowledged his mistakes at the time and since has described it as just one bad chapter in Netflix's history.
But I love the quotation not just because this has been one of the best stocks you could have owned over the last five years; but of course I love it as a fellow entrepreneur and I know many of you are entrepreneurs listening, as well. And so don'tcha love it? We see all the imperfections -- we should anyway -- in the things, the widgets that we're creating. The products and the services. We see all the things we should that aren't [with Reed Hastings] working.
At the office we're the ones that say, "We suck!" I certainly think you should be. You don't want to say it too loud and, as he said, you don't want to say it out of context. If you say it all the time somebody will start quoting you from The Wall Street Journal or Fortune magazine and all of a sudden you'll generate a headline about how much your company sucks, in this case.
But I think the key is that you're always looking to improve -- and especially if you're a visionary like Reed Hastings, or like some Motley Fools I know, or like you -- because I bet I'm speaking to some visionaries out there, then you're seeing. You know what you're trying to become, and so you're guided by a sense of what needs to be fixed. And a restlessness, if you will. A desire to get there and to be that thing years from now that you will be.
And now we can look backwards five years after Reed said that this month and see how Netflix is kind of king of the world these days. I'm a regular listener of many Motley Fool podcasts, and I think a recent Market Foolery was entitled something like, Netflix, [Destroyer] of Worlds within the last week. You can hear that podcast from our Market Foolery team, but that is kind of how Netflix is acting these days.
And I like to think, before we move to Quotation No. 4, that Reed Hastings still thinks the exact same thing today. Don't you think Reed might still say the exact same thing? That here in 2018 he sees all the imperfections in Netflix. He sees all the things that aren't working at the office, and he's still the one saying, "We suck!" I'd like to think that he is and I'm going to be really interested in seeing what Netflix becomes over the next five years.
So yes, Great Quotation No. 3; this one's for the entrepreneurs, whether you are one or just have one in spirit inside you. It's for all of us entrepreneurs. Constant improvement and always striving toward the vision that you see, whether it's your own company or a company that you work for; always looking to get better. And it's always inspiring to see people say that and then actually do it for all of us. It's even more inspiring when you own shares of the companies that go on to do that as they win, and I know I'm speaking to many fellow Netflix shareholders.
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